Associate 1 - 25k-50k (top-mid bucket) Bonus, people are going to be quitting left and right.

 

Definitely interesting. Don’t disagree with this thought process. Increasing Base pay may have reduced banking productivity due to the inherent change in bonus expectations.

Counterpoint tho is that some banks / groups paid 100%+ on the increased base. (Some kid at an EB in secondaries - see mega thread). Also don’t think productivity is an issue ->Just printer stopped going “brrrrr”. M2 money supply down, first time in history, as well.

 

Thanks for a real response unlike the poster above. Big caveat - I don't know if the following is accurate but can be done by pulling financials for some of the public advisory platforms. When you say paid 100% bonus on higher bases - that was for a banner year where most people were completely slammed. A more meaningful metric would be to adjust for headcount and fees. Ratio of Fee / Headcount plotted against Total Comp / Headcount and / or looking at Comp as % of Fee Revenue. Also don't forget the banks hired a lot of folks, so even if fee is back to 2019 (again, not sure if true - would be interesting to see full year earnings), you still have more mouths to feed than 2019 staffing levels. When fee is compressed, you adjust some combination of headcount and TC; with base salaries rising, you are forced to pay lower bonuses (before cutting into HC).

 

I prefer having a higher base (guaranteed money every month) than the uncertainty of a bonus that meets my expectations.

 

Even though bonuses aren’t hitting in-line with general IB expectations, can we really be expecting to see people quitting and lateraling out of their shops? Given current macro conditions and layoffs across the street there is a strong pool of talent that is looking to find their next gig which I feel creates a relatively competitive market to try and make a move. In that regard I feel like job security is everything right now (especially at the junior level).

Curious to hear if other have similar or different perspectives

 

Even though bonuses aren't hitting in-line with general IB expectations, can we really be expecting to see people quitting and lateraling out of their shops? Given current macro conditions and layoffs across the street there is a strong pool of talent that is looking to find their next gig which I feel creates a relatively competitive market to try and make a move. In that regard I feel like job security is everything right now (especially at the junior level).

Curious to hear if other have similar or different perspectives

None of the Top or Mid Bucket were cut. 

Layoffs are mostly the dead wood and bottom bucket. 

I get your point but this argument doesn't really hold water.

London Sponsors M&A - EB
 

it's pretty subjective who's mid bucket and who's bottom bucket. I bet among hundreds (or is it thousands at this point) of people laid off from various banks (mainly top banks like GS/MS), there are a few very solid people, let's say 200-300 high quality finance professionals who are looking for jobs now, and there are not many finance firms hiring now. so, I would agree that even with laughable bonus, it's a bad time to quit your place and search for a different job.

 

I think you can only interpret bonuses this bad across the board in a few ways. And before people point to how it isn’t that bad and fees are down etc, no reputable bank should be paying anything close to 25% of base as a bonus. An associate making  

Option A is this is essentially a layoff, they know a decent chunk of people will look for the door ASAP now and they avoid the cultural issues of a layoff. This is dumb to me since you risk losing your good talent as well and the lazy analysts stick around, but that’s just me. Also if this is the case you would think they’d still pay up for top performers (and it doesn’t sound like top bucket was much better).

Option B is that WB (and others) are just screwing juniors because they can - job market clearly sucks and there’s a bunch of recently laid off BB juniors looking for jobs right now. No one in their right mind would quit without something lined up and the lateral market is basically closed, tech hiring basically stalled, PE/GE funds are generally hiring less, etc. Essentially banks finally have leverage again after 2+ years of needing to suck up to junior bankers and they’re taking advantage.

Anyway it certainly leaves a bad taste in my mouth, some banks out there have chosen to continue to pay juniors because it’s not fair to punish them for a decline in firm revenue but WB and others have chosen to punish juniors. Sucks for all the juniors who got a bad number this year

 

Good lord, so are you looking at the exit door or wait till the lateral market opens again?